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Public sector lender Union Bank today posted a 15.39 per cent rise in its third quarter net profit at Rs 348.9 crore on higher growth in advances to retail, agriculture and MSME sectors. Its net interest income grew 3.81 per cent to Rs 1,963 crore from Rs 1,891 crore.

Domestic advances grew 18 per cent to Rs 2,10,496 crore from Rs 1,78,039 crore a year ago and global advances were up by 20 per cent to Rs 2,27,745 crore from Rs 1,89,997 crore. "Retail, MSME and agriculture were the main contributers to the growth. We will continue to focus on these three segments," bank's newly-appointed CMD Arun Tiwari told reporters.

The bank's domestic net interest margins (NIM) stood at 2.54 per cent compared with 3.03 per cent a year ago, while global NIM stood at 2.50 per cent as compared to 2.95 per cent a year ago.

"We do not expect NIM to fall below 2.6 per cent going forward and see it at 2.75 per cent in March," Tiwari said. Gross NPAs stood at 3.85 per cent compared to 3.36 per cent a year ago, while net NPAs jumped to 2.26 per cent as compared to 1.70 per cent in the previous year. "The pace of increase in NPAs is not going to be there now. We see some stability going forward," he said. Provision coverage ratio stood at 60 per cent as against 66 per cent.

Bank restructured Rs 1,004 crore of loans in the quarter and has a restructured pipeline of Rs 1,800 crore in the current quarter, he said.

Capital adequacy ratio, under Basel III, stood at 10.12 per cent.

The bank raised Rs 2,000 crore through issuance of Tier II bonds in the third quarter.